Monday, 21 November 2016

I
recently had a look at the ACCC's Regulator Performance Framework
self-assessment report 2015-16 which was released on 22 November 2016. Unfortunately,
while the headline seemed to suggest that the ACCC was performing well against its
KPI’s, the Report also showed that the ACCC’s Enforcement area is performing poorly
in relation to almost every one of its KPIs.The ACCC needs to be genuine about the feedback it has received and take
a good hard look at the way in which its Enforcement area is operating. It is simply
too easy to discount feedback from business and legal practitioners as “sour
grapes” and to then massage the numbers to hide the real and pressing problems.

Purpose of the Report

The
purpose of this report as follows:

The framework is concerned with how Commonwealth regulators administer
regulation, with the aim of encouraging regulators to undertake their functions
with the minimum impact necessary to achieve regulatory objectives. It is
therefore important to note that the framework does not seek to measure the
performance of the ACCC in relation to the outcomes we achieve for Australian
consumers and the economy. This said, there is some interaction between the
ACCC’s outcomes and the way in which we seek to minimise necessary impact and
these emerge in this assessment.

Glowing self-assessment with a few sour
grapesIt would
seem that the ACCC also performed quite well against its benchmarks, based on
Chairman Ros Sims’ self-assessment of the Report:

The ACCC considers we have established a solid
benchmark with the 2015-16 self‑assessment report on which to measure and
compare our performance in future reporting periods.

A majority of the ACCC’s business stakeholders have
a positive view of our performance. However, businesses which have been the
subject of recent ACCC enforcement activity gave less positive assessments of
the ACCC’s enforcement functions.

Some key areas for attention and improvement have
been identified across the ACCC, particularly in relation to fostering better
communication with businesses that are subject to investigations and regulatory
actions.

In other
words, in the ACCC’s view, its performance across most business areas was quite
positive with the exception of the Enforcement area.However, Sims appears to explain these
criticisms away as nothing more than “sour grapes” – namely, the businesses
which had been the subject of recent ACCC enforcement action have provided negative
feedback. Indeed, the implication is that these businesses and their legal
advisors have provided false information to the ACCC about the way in which the
ACCC Enforcement area is operating.

Enforcement area – the real deal

Unfortunately,
when you drill down in more detail to the ACCC’s Report you realise that the
responses received in relation to the ACCC Enforcement area bear little resemblance
to the way in which the ACCC has presented those results.

The
following table shows the various responses received from survey participants
about each of the ACCC’s major areas.The total percentage of respondents that agreed or
strongly agreed with a statement regarding our performance against the KPI is
represented in green, while the percentage
that disagreed or strongly disagreed is in red for
each function area.

M&AR
%

S Bus
%

P Safe
%

InfReg
%

Enforce
%

KPI 1:The ACCC does not
unnecessarily impede the efficient operation of regulated entities

The ACCC has
self-assessed negative feedback from survey participants in relation to KPI 1 - The ACCC does not unnecessarily impede the
efficient operation of regulated entities - as satisfactory despite 29% of
respondents stating that the ACCC was doing a good job in relation to this KPI
and 43% of respondents disagreeing.How the ACCC could possibly self-assess its performance against KPI 1 as
“Satisfactory” is beyond me.

The self-assessment in relation to KPI 2 - The ACCC’s communication with regulated
entities is clear, targeted and effective - is more defensible. 40% of
respondents believed that the ACCC was doing a good job in relation to this KPI
while 33% disagreed.

KPI 3 which relates to - Whether
the actions undertaken by the ACCC are proportionate to the regulatory risk
being managed - comes out at a commendable “Good” rating, which seems
somewhat surprising given that 38% of respondents thought that the ACCC was doing a
good job and 38% of respondents disagreed. I think that a more accurate
conclusion in relation to KPI 3 would have been a “Poor” rating, given half of
survey respondents thought that the ACCC was doing a poor job.

KPI 4 - The ACCC’s
compliance and monitoring approaches are streamlined and coordinated - comes
in rightly at a “Poor” rating, with 29% of respondent’s believing the ACCC was
doing a good job and a massive 50% disagreeing with that
statement.This result should be of
great concern to the ACCC, even allowing for the “sour grapes” effect.

KPI 5 namely that - The
ACCC is open and transparent in its dealings with regulated entities - is
again very difficult to understand given that the ACCC has self-assessed itself
as “Satisfactory” with 25% of respondents believing that the ACCC was doing a
good job in being open and transparent, with 42% disagreeing.In reality, the ACCC’s self-assessment for
KPI 5 should have been yet another “Poor”.

Finally, in what must be the considered the most puzzling
example of the ACCC’s questionable self-assessment, the ACCC concluded that in
relation to KPI 5 - The ACCC actively
contributes to the continuous improvement of regulatory frameworks - it merited
a “Good” grading. This is despite 30% of respondents believing that the ACCC
was doing a good job and 42% disagreeing.

It is quite remarkable that the ACCC has firstly sought to
discount the responses which it received from businesses and their legal
advisers about the ACCC’s Enforcement performance as “sour grapes”.What is more remarkable is that it has then
sought to present the statistics in a way which masks the reality and depth of
the problems which exist within the ACCC Enforcement area.

In my view, the ACCC’s Enforcement area’s report card against
its KPIs should look more like this:

Enforce

KPI 1:The ACCC does not
unnecessarily impede the efficient operation of regulated entities

ConclusionsThe ACCC has to “get real” about the performance of its Enforcement
area.As stated above, it not acceptable
for the ACCC to attribute poor feedback from businesses and legal practitioners
to the “sour grapes” factor and then to massage the statistics to hide the reality
and depth of the problems within the ACCC Enforcement area.A self-assessment which does not accept the criticisms
made is not a self-assessment at all, but rather an exercise in self-delusion.